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Brian Lehrer: Brian Lehrer on WNYC. To quote my next guest's piece on Vox, "The United States, the world's richest country and its most important developer of pharmaceuticals is not supposed to run out of prescription drugs, and yet it does all the time." Some troubling examples of that are in the news right now. With me now is Dylan Scott, senior correspondent covering healthcare at Vox. He just published a story on Monday titled Why Does The US Keep Running Out of Medicine? Dylan, thanks for coming on. Welcome back to WNYC.

Dylan Scott: Thanks for having me.

Brian Lehrer: Many people have been seeing headlines or experiencing this for themselves, about certain drug shortages happening now for things like Adderall, hello everybody with ADHD, amoxicillin, and Tamiflu here in the flu season, but the list is larger than those. We'll get into some of the others, but those are real headline, very commonly prescribed prescription drugs. What's going on with Adderall, amoxicillin, and Tamiflu? Is the answer the same for all three?

Dylan Scott: In general, yes. Drug shortages are a structural problem with the US health system. I was double-checking the numbers this morning and there are currently 260 drugs experiencing a shortage right now and that number has basically been consistent for the last three years. At any given time, there are hundreds of drugs that are experiencing a shortage. When it really becomes a problem in terms of the medical care that people receive is when we're in an emergency situation like we're seeing right now with this surge in respiratory infections that has been occurring across the country over the last few weeks and even months, I can tell you from having a couple of kids in daycare myself.

There generally are shared features of drug shortages, which is that, basically, there's usually some kind of problem at the facility that produces these drugs, whether there's been some violations of the FDA's quality standards or companies have maybe had trouble accessing the raw materials that they need to produce these drugs, some kind of obstacle has occurred either at the raw material stage or the production stage.

Because of the way that the prescription drug market is structured, where there's just no incentive for these companies to either invest in expanding or modernizing their production facilities and there's certainly no economic incentive for them to produce an excess emergency stockpile of supplies, they tend to do a just-in-time production schedule, which means as on as the drugs are produced at the factory, they're delivered to hospitals and doctor's offices, and there's just no emergency backup stockpile of drugs to be found.

Once a shortage occurs, it's really hard to alleviate it, and especially in the situation like we have right now, where there's a surge of illness going on, people need these, amoxicillin and Tamiflu are often used for respiratory infections. For young people who contract RSV and have asthma, they might need albuterol, and that's another drug that we're experiencing a shortage of right now.

We're just in a situation where we're stuck. These medical emergencies aren't going anywhere, but because we don't have any excess supply and we haven't built the mechanisms in our prescription drug market to try to alleviate these shortages in a timely fashion, there's nothing for people to do. Basically, doctors, and nurses, and patients just have to try to muddle through, either not using the drugs that they should be using or relying on substitutes that might not work as well.

Brian Lehrer: The albuterol certainly brought me up short. I've had a close relative with obstructive airways condition or asthma, who at times has really needed albuterol to breathe, and I don't know what would've happened if there was a shortage of albuterol on one of those occasions. Listeners, help us report this story, has the nation's drug shortage affected you or your family personally? 212-433-WNYC, 212-433-9692. How have you coped with the situation? Or maybe you can help report why this is happening.

Hello, New Jersey, with a lot of pharmaceutical industry facilities. Anybody from the New Jersey pharma industry want to give us a little professional insight into this? Or you can ask our guest, Dylan Scott, from Vox a question. 212-433-WNYC, 212-433-9692, or tweet @BrianLehrer. Is the Adderall shortage, Dylan, a special situation due to the huge increase in ADHD diagnoses and prescriptions in the past few years or is it just emblematic of all these issues you laid out?

Dylan Scott: In general, shortages are actually not caused by an increase in demand, especially those kinds of longer-term trends. That is something that a manufacturer can plan for and hopefully expand their production capacity in anticipation of. With the Adderall shortage specifically, and this applies to all of the shortages that we're talking about, it's been manufacturing delays as well as a bit of the fact that demand is higher certainly doesn't help, but it's primarily manufacturing delays, problems at their manufacturing facilities that have led to this shortage.

One of the frustrating things about this space is that these companies are not necessarily required to report exactly why they are experiencing a shortage. That's one of the things that experts who have looked at this problem and tried to come up with potential solutions have highlighted, is that we just need more information about why shortages are happening in the first place, exactly where in the supply chain things are breaking down, and that would allow us both to just anticipate shortages.

If it's a problem with raw materials, we might be able to get a little more in front of the problem if we have more forewarning about a shortage in that space that's going to lead to troubles producing the drugs in a few months or what have you. That is what primarily draws drug shortages. The reason is that most of the drugs that experience shortages tend to be really cheap drugs, generic drugs that have gone off-patent. Anybody with the wherewithal or the business interest in producing them can produce a generic version of Adderall or Tamiflu or some of these drugs, but generic drugs, as your listeners might know, they tend to be really cheap.

That's part of the idea, they're supposed to be a cheaper alternative to the brand name drug that's already on the market, but because they're cheap, there isn't a lot of economic incentive for the manufacturers to invest in the quality of their manufacturing facilities or in producing any excess supply that might help to ameliorate a shortage if we experience one. This is largely being driven by the economic fundamentals of the prescription drug market and the generic drug market specifically. If you're selling a pill for $2, you're not necessarily generating a lot of revenue and you're not going to make the kinds of investments that might make shortages less likely.

Until we break that wheel, break that cycle where there's just this race to the bottom with prices that leads to manufacturers not wanting to invest in making sure that their production processes don't break down and we don't experience the shortage, this problem is just going to keep recurring again and again.

Brian Lehrer: Tamara in Orange County, you're on WNYC. Hi, Tamara.

Tamara: Hi. Good morning. One of the things that I've seen is that as a doula, clients having reduced options. For example, a client was offered one drug for pain relief because Nubain was in shortage and they said that it had been in shortage for a while at this particular institution. It's things that you don't think about. When you go in for care, you have this plan and you show up and then your options are dwindled down. I don't know where else it's impacting, but that's where I've seen it.

Brian Lehrer: Interesting. For you as a doula, I imagine you like to avoid Pitocin whenever possible for the women you work with giving birth. That's a drug that induces labor if somebody's having a really hard time actually getting to the point of delivery, but when people need it, they need it. That's another drug that's in short supply. I wonder if you've come up against that.

Tamara: Interestingly enough, my last couple of clients have been offered inductions with that not being an issue, that wasn't a problem. In the event there was a situation where they needed some help, their body needed some help, that could be a problem. So far I haven't encountered it, but that could be detrimental to what's happening, although you can't plan everything.

Brian Lehrer: Tamara, thank you so much for your call. Danielle in Manhattan, you're on WN YC. Hi, Danielle.

Danielle: Yes. Hi, Brian. You have a great show. I've been listening for years. Thank you for all you do. This topic for me is a little personal. I worked in pharmaceutical distribution at a private company, but I saw firsthand at the time, now, I haven't been in it for about 15 years, so things may have changed, but I think mainly, the problem structurally is that there are three manufacturers in the United States that monopolize most, if not all, of drug production. I would love for your guests to speak more about that.

When we say manufacturers don't have an incentive, it's very impossible to be incentivized when you have a monopoly and are controlling every level, who gets what, how many are sold. There are legal limitations, but many distributors get around that by having other distributors like subcontractors buy up drugs and then hoard them or sell them at a higher rate when they can get more money.

Brian Lehrer: Dylan, want to weigh in on that?

Dylan Scott: Yes. Danielle is absolutely right. One of the reasons that shortages keep recurring is that most of these kinds of drugs, these generic drugs, whether they're orally administrated or injectables, tend to have only one or two manufacturers. If one of those manufacturers suddenly can't meet their production expectations because they can't access the raw materials or they've had a problem at one of their factories, there isn't an easy way to fill that hole.

Some of these manufacturers might be responsible for half or even more than half of a given drug supply in the United States. This does go back to just the economic fundamentals of the market, because these tend to be generic drugs that are sold very cheaply, there isn't a strong business incentive for a bunch of different companies to get involved in producing that drug. You're going to tend to have one or two companies that dominate the market.

They try to scoop up as much of the market share as they can and then they sell it at a very low price. They depend on selling a really high amount of volume in order to make their margins and actually make money, but you can see the problems that creates if one of those producers suddenly can't deliver those drugs like they had anticipated.

Brian Lehrer: We spent so much time as people who cover health talking about the high price of prescription drugs. Are you saying these shortages are caused in part because the price is too low?

Dylan Scott: Yes, and I think this is where the bifurcated nature of the US drug market is really important. When we talk about the high price of drugs, that tends to be one of two things, either it's a new drug, like the new hepatitis C drugs, for example, or a new cancer treatment or something like that, that's coming onto the market for the first time and these brand name prescription drug companies are setting prices in the tens of thousands of dollars for a year, something like that.

There's a debate about whether those companies are basically exploiting the monopoly that we give them as a result of developing that drug, but that's where the conversation about high drug prices tends to take place as well as some specific instances from the Martin Shkreli days. People might remember that story of like, hey, basically a bad actor buying a generic version of a drug and then just hiking up the price because maybe they're the only supplier of that drug in the US, and because they have that monopoly, even though the drug is technically off-patent, they're able to hike up the price substantially and patients and providers don't have anywhere else to go.

On the flip side of that, the generic drug market is supposed to be cheaper. That's why it exists in the first place. After there's 10 years of a brand name company enjoying a monopoly on a drug they developed, we want other competitors to enter the market and offer cheaper versions of that drug, but that does create this race to the bottom, where in order to eat up as much of the market share as they can, the suppliers, the generic drug manufacturers tend to price their products really low.

Obviously, hospitals and doctors, when they're looking in the market and trying to identify which drugs they're going to purchase for their patients, price is a really important consideration for them. They might not care too much about the quality of your manufacturing plants or what have you. They're not necessarily making purchase decisions based on that, they're just looking at the price and going with the lowest one that they see, which is just normal economic behavior.

What experts want us to do is to, like I said, try to break that cycle of this race to the bottom with the cost of generic drugs, which does then create these perverse economic incentives, where companies don't invest in the quality of their manufacturing plants. They don't create safety valves and other backstops in case they have a product that does experience a shortage, but that's where there is a flip side to the discussion about high drug prices, and that's if drugs are priced too low, it can create these other kinds of problems and actually producing enough supply for American patients.

Brian Lehrer: Alex in Manhattan, you're on WNYC. Hi, Alex.

Alex: Hi, Brian. Thanks for taking my call. I'm calling to share from the patients side, I guess. I've been hit by two drug shortages for both of these were maintenance medications. One of these- [crosstalk]

Brian Lehrer: Alex, let me ask you to speak up or speak right into your phone. We're getting you at a little bit of low volume, sorry.

Alex: Oh, sorry. Okay. I'm calling from a patient side and I've been hit by two different drug shortages now, and both of these were maintenance medication. One of these was the mood stabilizer, so not being on it was very bad for me. As well there's a high withdrawal cost. The other one has been Adderall, which is more recent, and that's actually interesting because I was [unintelligible 00:16:53] to it because I accepted the social stereotypes of it, but now I really depend on it to focus on work. Since [unintelligible 00:17:08] it will take me hours to do something I could have done in one hour. I guess the question for this would be, is there zero consideration for human cost?

Brian Lehrer: Yes. Are there alternatives? Did you speak to whoever you get your prescriptions from about other things that may help you in similar ways?

Alex: No, especially for the mood stabilizer. If you want to change a mood stabilizer or if you want to change any antidepressant also, you have to pay for it and gradually go into the second one, so essentially, getting cut up cold turkey. I think I was off it for a week. I just was in a haze for an entire week.

Brian Lehrer: First person report on the effects on real people's lives. Alex, thank you for sharing that. It makes it even harder in those cases, I imagine, because those are controlled substances, right, Dylan?

Dylan Scott: Yes. Right, exactly. This is one of the maddening things, is that we know drug shortages don't serve anybody well, and in the end, they are most going to affect patients. We do have research that shows drug shortages lead to worse clinical outcomes. There was actually about 10 years ago a year long shortage of a drug that is used when somebody goes into septic shock, it helps to regulate blood pressure, that kind of thing.

For a year, there were at least localized shortages across the country, and so researchers actually use that opportunity to study what happens when somebody is treated for septic shock in a hospital that doesn't have access to this drug versus somebody who's treated in a hospital that does. They found that in the facilities that were short of this blood pressure medication, patients were more likely to die if they went into septic shock than people at the hospitals that did have the drug on hand.

Obviously, as you said, Brian, there do tend to be workaround options, there are substitutes, but, A, those don't necessarily have the same clinical benefits for each individual patient that the actual drug that they were prescribed and supposed to be taking would, and that can be costly. The hospital staff has to learn a new protocol for these new drugs and hospitals and doctors' offices have to purchase the substitutes, which helps to drive up the cost for everybody.

That's what's maddening about the problem, is it doesn't help anybody. It's bad for the manufacturers, it's bad for providers, it's bad for patients, but because we're so reliant on market forces to try to correct these things when they happen, we don't really have a lot of options to avert those bad outcomes.

Brian Lehrer: This is WNYC FM HDNAM New York, WNJT-FM 88.1 Trenton, WNJP 88.5 Sussex, WNJY 89.3. Netcong, and WNJO 90.3 Toms River. We are a New York and New Jersey Public Radio and live streaming at wnyc.org. About to finish up with Dylan Scott, senior correspondent covering healthcare at Vox on the life and death implications of increasing drug shortages, pharmaceutical shortages in the United States.

To begin to close out, Dylan, listener tweets, "Please ask your guest what do other countries do, especially "high income countries"? Quotes you saying, "We are stuck." Are other countries similarly stuck, and how could we change our system to unstick our country? Then the listener writes, "I mean, albuterol? WTF." Can you answer that question?

Dylan Scott: It's a fair question. I do think we should be clear. Some of this is just inherent to the challenge of producing prescription drugs no matter where you are. Here in the last few months, Canada, which has diametrically different of a healthcare system as the United States as you could come up with, where their single payer national healthcare program has been experiencing a shortage of children's Tylenol. Part of this is just producing prescription drugs is complicated. You have a lot of raw materials, the manufacturing process can be technically very sophisticated, and as a result of the way and--

It can be hard to just build up an emergency supply or to suddenly ramp up production somewhere else if you do start to experience a shortage, but experts do have ideas about some things that they think we could do to try to alleviate this problem. Primarily, it starts with just more transparency. We need more transparency from manufacturers about the raw materials that they rely on, the supply chains for those materials.

Like I think I said before, that could allow us to anticipate drug shortages sooner and start to maybe put some emergency protocols into place to try to address them. Some of the experts I spoke to, like Aaron Fox at the University of Utah, want to see us start to reflect the quality of a drug company's manufacturing process is in the prices that we pay for drugs. Maybe we should be doing things through contracting between hospitals and drug manufacturers or insurers and drug manufacturers that actually reward them for making investments and creating redundancies in their production schedule so that shortage are sort of less likely.

The problem is there's just no economic incentive in the market right now for companies to make those kinds of investments. With more information just being publicly available and with starting to basically tinker with the bottom line, which is how healthcare actually gets paid for, we might be able to do some things that incentivize manufacturers to have higher-quality production processes that hopefully would lead to less shortages.

It'd probably be impossible to eliminate them entirely, because in the end, it's not going to make sense for there to be just stockpiles of every kind of prescription drug littered across the country. We could certainly be doing a better job than we are now. A report that I relied on for my piece from the National Academies earlier this year emphasized that drug shortages are both happening more often and they are lasting longer over the last 10 years.

This is a problem that's getting worse. There's clearly more that we could do to try to make the problem easier to manage, but that would require the federal government really gettin invested in solving this problem, putting some stronger rules in place for drug manufacturers and for healthcare providers to try to move everybody in the right direction.

Brian Lehrer: Dylan Scott, senior correspondent covering healthcare at Vox, who just published story on Monday titled Why Does the US Keep Running Out of Medicine? Thank you. It's very informative, Dylan. We really appreciate it.

Dylan Scott: Thank you.

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